Retirement savings–it’s a topic that has plagued workers for generations. And, according to a new report, today’s youngest workers are particularly challenged by the topic.
A survey of 1,000 workers under age 34–typically considered in the Millennial and Generation Z demographic groups–by Fisher Investments 401(k) Solutions revealed a significant knowledge gap when it comes to retirement savings. As part of the survey, Fisher asked participants to complete a “knowledge quiz,” which 69% of respondents failed. The failure rate was much higher among Gen Z and Millennial participants (84%), compared to Gen X (70%) and Baby Boomers (55%).
Other findings include:
- 75% of participants couldn’t identify what a mutual fund is;
- nearly half didn’t know how much they’d need in retirement savings;
- and 70% didn’t know when they can tap into 401(k) savings without paying fees.
Employers and plan providers can be doing more to help raise awareness about retirement savings, participants said. In particular, 43% of respondents reported being less than satisfied with the financial education offered by the provider, while nearly half said they don’t think their plan is competitive compared to others in the industry.
“For participants, the lack of retirement knowledge carries immediate emotional consequences,” researchers wrote in the report. “More than 80% are concerned about running out of money in retirement. And, employers risk staff turnover and possibly hurt their ability to recruit talent when workers are not confident about their retirement plan.”
When employees are provided professional advice on their investments, there is a payoff for the employer, the survey found: About 77% said such guidance illustrates that the employer cares about its workers, while 66% report more loyalty to their company.